The Australian Travel Industry Association (ATIA) welcomes the Federal Government’s announcement today on reforms to Sydney Airport slot management as a positive step towards strengthening aviation competition.
Currently, a company that is majority-owned by Qantas and Virgin allocates the slots in and out of Australia’s biggest gateway. This practice has long been criticised for its lack of fairness and transparency, effectively locking up part of the slot pool and making it challenging for new entrants to gain a foothold in the market.
The announced reforms, which will see a competitive tender process opened to appoint a new Sydney Airport Slot Manager, are a significant move towards levelling the playing field between Australia’s domestic airlines. This will increase fairness and transparency in slot management, addressing one of the critical issues that have hampered competition at Australia’s busiest airport.
Effective aviation competition in Australia is a significant issue that ATIA has long been advocating for. It is vitally important that public-policy settings support a level playing field regarding access to infrastructure and route opportunities. The 80-20 rule, which allows airlines to retain slots as long as they don’t cancel more than 20% of flights in a given slot over the year, is outdated and needs to be reformed to further enhance competition.
ATIA commissioned a comprehensive study, conducted by former Qantas economist Tony Webber, which provides a detailed analysis over two decades, demonstrating a trend where airlines often cancel flights for purely commercial reasons, impacting both the travel industry and consumers.
The report is available here. Typically, at least 70% of all international air sales in Australia are through our members, and over 90% of corporate sales (medium and large businesses), rather than directly through airlines. This year alone, ATIA members booked $13.5 Billion TTV of retail bookings, $11.8 Billion of Corporate Bookings and $5.6 Billion of Land Operations.
“The reforms announced today by the Federal Government are a common-sense approach to improve competition in our aviation sector. By opening up the process to appoint a new Slot Manager through a competitive tender, we are moving towards a more transparent and fair system that will benefit all airlines and, ultimately, consumers,” ATIA CEO, Dean Long said.
“However, while this is a positive step forward, there are still several reforms previously announced but yet to be implemented. These include changing the allocation process to free up more slots and revising the definition of ‘new entrant’ to make it easier for new airlines to obtain slots. We urge the Government to act on these reforms as soon as possible and call on Parliament to support the necessary legislation.”
“ATIA will continue to call for action on the 80-20 rule to deliver better outcomes for travelling Australians and the many travel businesses who support them. It is essential to modernise this benchmark to reflect current market conditions and support the growth of a competitive domestic aviation sector.”
